One of the points I tried to make in my Contingencies article about AIG was that Hank Greenberg, the CEO who built the company, was the ultimate risk manager. When he was forced out, no one else could control the enterprise.
Now Risk and Insurance has a whole article around the idea, including an interview with Greenberg himself:
At the center of Greenberg’s 40-year tenure was an “obsession with risk,” as one colleague said, with Greenberg defining his role in his own words as “the chief risk officer” of an “enterprise risk company.”
But Hank is a bit skeptical of enterprise risk management as a discipline:
Greenberg is skeptical about enterprise risk and the insurance community. “For a CEO, I’m not sure that half of them understand enterprise risk.
“You have to understand the risk. For example, if you’re writing something in the energy field, you have to understand that business. If it’s a construction area, who is the contractor? What kind of workers are there? What are the plans?”
At bottom, he said, “you can’t substitute for good management and good judgment. You can talk about that a thousand different ways. If you have a CEO that doesn’t live up to the job, don’t blame everything else. It’s his job.”
And, Greenberg added, “You need the judgment of the CEO. He’s the chief risk officer.”